Chris Christie’s Transportation Troubles Continue

Tesla Motors has accused the New Jersey governor’s office of not acting “in good faith” in their business negotiations.

Tesla Model S sedans.
National Journal
Marina Koren
Add to Briefcase
Marina Koren
March 11, 2014, 9:19 a.m.

The Christie ad­min­is­tra­tion is cre­at­ing more car prob­lems.

That’s at least ac­cord­ing to Tesla Mo­tors, which could lose its right to sell vehicles in New Jer­sey be­cause of a reg­u­la­tion pro­posed by the gov­ernor’s of­fice.

The elec­tric car com­pany wrote in a post on its web­site Tues­day that Gov. Chris Christie’s ad­min­is­tra­tion has backed out of a deal that would delay li­cens­ing le­gis­la­tion, passing it in­stead to the state Le­gis­lature, which is ex­pec­ted to ap­prove it later Tues­day.

The rule would re­quire all new car deal­ers to sign a fran­chise agree­ment with auto­mobile man­u­fac­tur­ers in or­der to re­ceive a li­cense from the state. However, as Steph­en Edel­stein ex­plains at Green Car Re­ports, since Tesla is both the man­u­fac­turer and dis­trib­ut­or of its cars — which means there’s no middle­man — such an agree­ment would be im­possible.

“The ad­min­is­tra­tion has de­cided to go out­side the le­gis­lat­ive pro­cess by ex­ped­it­ing a rule pro­pos­al that would com­pletely change the law in New Jer­sey,” Tesla Mo­tors ex­plains. In months pre­vi­ous, the com­pany had been “work­ing con­struct­ively” with the ad­min­is­tra­tion and the New Jer­sey Mo­tor Vehicle Com­mis­sion. “This new rule, if ad­op­ted, would cur­tail Tesla’s sales op­er­a­tions and jeop­ard­ize our ex­ist­ing re­tail li­censes in the state.”

Tesla called on Christie to with­draw or change the pro­posed amend­ment. The com­pany’s ex­ist­ing two loc­a­tions in New Jer­sey would be in vi­ol­a­tion of New Jer­sey law if it passes. The reg­u­la­tion would be a win for the New Jer­sey Co­ali­tion of Auto­mot­ive Re­tail­ers, which fa­vors the use of a third-party deal­er.

A Christie ad­min­is­tra­tion spokes­man told Busi­ness In­sider Tues­day that Tesla Mo­tors has it all wrong: The car com­pany is the one try­ing to skirt le­gis­lat­ive pro­ced­ure, not the oth­er way around. “This ad­min­is­tra­tion does not find it ap­pro­pri­ate to uni­lat­er­ally change the way cars are sold in New Jer­sey without le­gis­la­tion and Tesla has been aware of this po­s­i­tion since the be­gin­ning,” he said in a state­ment.

Tesla Mo­tors’ dir­ect-sales mod­el has faced res­ist­ance in oth­er states as well. The com­pany has de­feated le­gis­la­tion that would cur­tail its busi­ness in Mas­sachu­setts, Min­nesota, New York, and North Car­o­lina. In Ohio, car deal­ers have pushed for reg­u­la­tions that would ban man­u­fac­tur­ers from selling cars dir­ectly to con­sumers, and Ari­zona, Col­or­ado, Texas, and Vir­gin­ia have banned new Tesla-owned stores al­to­geth­er.

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